A Lifetime of Financial Advice in your Wallet

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We read a recent newspaper article that discussed simple rules for a financial lifetime that would fit on just one index card, and while many of them were incredibly similar to concepts we describe here on RichmondSavers.com, some of them were too specific even for the average person.

With that in mind, we came up with our 11 Simple Financial Rules for a Wealthy Life, which when drafting we envisioned fitting in the wallet of every recent college graduate in America as simple advice to follow to nearly ensure yourself a prosperous financial life.

Simplicity Is Often the Best Financial Advice

We all often get bogged down in the details of life, but if you adhere to a measure of simplicity and try to avoid complexity and stress when they aren’t necessary, you can enjoy your journey much more and end up way ahead financially.

11 Simple Rules

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Comments

    • Glad you enjoyed it!! Absolutely, there’s a whole assortment of other items that people might include or exclude from our particular list, but the larger point holds that if you follow a set of simple, common-sense principles and stick with them for 50 years, you’re going to be wealthier than just about everyone around you, and a whole lot less stressed!

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    • I’m glad you enjoyed the list Andrew. There of course is complexity in the financial world, but using a list such as this will get you 95% of what you need with 0% of the hassle! I feel like people get turned off by everything they don’t know financially and don’t both to do the “easy” things that will make them wealthy beyond their wildest dreams.

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  3. Rule number 8 made a great impact because come to think of it, I believe many financial difficulties started because of the tendency to impress. It may be human nature but often, just to impress, unnecessary purchases happen and it is not only car or house. I was admittedly guilty of this but I am now doing my best to live within my means. It is not easy, yes, but one slow step at a time is better than not exerting any effort at all.
    Jen @ Frugal Rules recently posted…If a Government Shutdown Causes an Economic Crisis, Will You be Ready?My Profile

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    • Hi Jen — thanks for stopping by! I think a lot of us were guilty with this desire to impress at one point or another, but as long as we’re aware of it and trying to get better, that’s all you can ask for. I saw someone driving around in a Jaguar the other day and I seriously thought it was a Hyundai from the side. It was only when I saw the dopey little Jaguar on the hood that I realized this ridiculous car probably cost at least $40,000. Can you imagine spending that just for the name? It’s an ugly car, but yet I’m certain that person talks about their “Jag” over and over. I’d rather have the Hyundai, which is likely more reliable anyway, and pocket the extra $25,000.

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  4. No. 10 is excellent and one I wish people would get. Everyone gets so caught up in the house being an investment and it’s really your biggest cash drain. For most people, houses are just boxes we threw our money into and very little more.
    Pretired Nick recently posted…‘OMG, I’m SO BUSY’My Profile

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    • I couldn’t agree more!! A house is a terrible “investment” in general and owning is really a bad option for the vast majority of people as they are stuck with an illiquid asset that requires constant maintenance, repair, taxes, etc.. They put the vast majority of their life savings into this “box” and they can’t ever access that money other than taking a loan against it. But yet because it’s part of the “American Dream” we all move like lemmings into buying as soon as we can.
      If you’re looking for a great read, check out this article: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

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    • Thanks for the comment Charles — I’m glad you enjoyed! I struggle with the advice to ‘max out’ retirement accounts. For many people who otherwise can’t save and don’t expect to retire before 59.5 this is probably excellent advice. But for those of us who expect to need the money well before 59.5, I’m not sure maxing out retirement accounts is the way to go. I know this is a point for serious reflection and debate and I think both sides have valid points; I personally want access to regular savings and investment funds outside of my retirement accounts that have significant restrictions on when I can access the funds.

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  6. I love that you made this one a LOT easier, and simpler, to follow than that note card one (which I also enjoyed – though got a little lost and then gave up mid-way through reading it ;)). First time on your blog here, and looking forward to reading more.

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    • Thanks so much J$, I’m glad you liked this article in particular as it is one that I’m proudest of! Obviously this doesn’t have all the answers, but I truly believe if people followed these items they’d have a pretty incredible financial life…

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    • Keep in mind this is all my own personal opinion and many might disagree: Buying and selling a house carries such huge transactions fees (think 6% real estate commission which means you’re paying $18,000 on a $300,000 hour. That’s $18,000 essentially put in a fireplace and burned) that it is almost impossible to recoup it in fewer than 5-10 years under normal circumstances.

      Then throw in the fact that early in the amortization table you’re only paying a fraction of your monthly payment in principal over the first 5-15 years with the stress that would go with having a big portion of your net worth tied up in an illiquid asset and that leads me to say you should not buy unless you’re staying for the long term and you stop considering it an “investment.”

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